Southwest Airlines Co. (NYSE:Â LUV) is a major U.S. airline, the world's largest low-cost carrier, headquartered in Dallas, Texas.
The airline was established in 1967 by Herb Kelleher as Air Southwest and then adopted its current name, Southwest Airlines, in 1971 when it began operating as an intrastate airline wholly within the state of Texas. The airline has more than 53,000 employees as of October 2016 and operates more than 3,900 departures a day during peak travel season. As of 2014, it carried the most domestic passengers of any U.S. airline. As of August 2017, Southwest Airlines has scheduled services to 101 destinations in the United States and eight additional countries, with service to Turks & Caicos beginning on November 5, 2017.
Southwest Airlines has only operated Boeing 737 jetliner models, except for the period from 1979 to 1987 when it leased several Boeing 727-200s from Braniff International Airways. As of January 2016, Southwest is the largest operator of the Boeing 737 worldwide, with over 700 in service, each averaging six flights per day.
History
In 1966 Southwest Airlines was founded by Rollin King and Herbert Kelleher; in 1967 it was incorporated as Air Southwest Company. It was not until 1971 that the airline began scheduled flights, from Dallas Love Field. The same year the organization adopted the name Southwest Airlines. The expansion of flights started in 1975, to cities throughout Texas, and in 1978 Southwest began flying to neighboring states. Service to the East and the Southeast started in the 1990s.
Corporate identity
Advertising
The company has employed humor in its advertising. Slogans include "Love Is Still Our Field," "Just Plane Smart," "The Somebody Else Up There Who Loves You," "You're Now Free To Move About The Country," "THE Low Fare Airline," "Grab your bag, It's On!" and "Welcome Aboard." The airline's current slogan is "Low fares. Nothing to hide."
In March 1992, shortly after Southwest started using the "Just Plane Smart" motto, Stevens Aviation, which had been using "Plane Smart" for its motto, advised Southwest that it was infringing on its trademark.
Instead of a lawsuit, the CEOs for both companies staged an arm wrestling match. Held at the now-demolished Dallas Sportatorium (the famed wrestling facility) and set for two out of three rounds, the loser of each round was to pay $5,000 to the charity of his choice, with the winner gaining the use of the trademarked phrase. A promotional video was created showing the CEOs "training" for the bout (with CEO Herb Kelleher being helped up during a sit up where a cigarette and glass of whiskey (Wild Turkey 101) was waiting) and distributed among the employees and as a video press release along with the video of the match itself. Herb Kelleher lost the match for Southwest, with Stevens Aviation winning the rights to the phrase. Kurt Herwald, CEO of Stevens Aviation, immediately granted the use of "Just Plane Smart" to Southwest Airlines. The net result was both companies having use of the trademark, $15,000 going to charity and good publicity for both companies.
Honor Flight Network
Southwest Airlines is the official commercial airline of the Honor Flight Network. Honor Flights are dedicated to bringing aging and ailing veterans to visit the national monuments in Washington, D.C., devoted to the wars in which they served.
Corporate affairs
Headquarters
The Southwest Airlines headquarters is located on the grounds of Dallas Love Field in the Love Field neighborhood of Dallas, Texas.
On September 17, 2012, Southwest broke ground on a new Training and Operational Support (TOPS) building. The TOPS Building is across the street from its current headquarters building. The property includes a two-story, 100,000-square-foot operations building that can withstand an EF3 tornado. It also includes a four-story, 392,000-square-foot office and training facility with two levels devoted to each function. The new facilities house 24-hour coordination and maintenance operations, customer support and services, and training. The project was completed in late 2013, with occupancy beginning in 2014.
Employment
As of December 31, 2016, Southwest Airlines has more than 53,000 employees.
Gary C. Kelly is Chairman and CEO of Southwest Airlines. Kelly replaced former CEO Jim Parker on July 15, 2004 and assumed the title of "President" on July 15, 2008, replacing former President Colleen Barrett. In July 2008, Herb Kelleher resigned his position as Chairman. Colleen Barrett left her post on the Board of Directors and as Corporate Secretary in May 2008 and as President in July 2008. Both are still active employees of Southwest Airlines. Kelleher was President and CEO of Southwest from September 1981-June 2001.
On January 10, 2017, Southwest announced changes to the Company's executive Leadership ranks with Thomas M. Nealon named as President and Michael G. Van de Ven named as the airline's Chief Operating Officer.
Labor relations
In contrast to low-cost competitor JetBlue Airways, where most employees are non-union, Southwest employees are generally members of a union. The Southwest Airline Pilots' Association, a union not affiliated with the Air Line Pilots Association, represents the airline's pilots. The Aircraft Maintenance Technicians are represented by the Aircraft Mechanics Fraternal Association (AMFA). Customer Service Agents and Reservation Agents are represented by the International Association of Machinists and Aerospace Workers Union (IAM). Flight Dispatchers, Flight Attendants, Ramp agents and Operations agents are represented by the Transport Workers Union (TWU).
Sponsorships
Southwest Airlines is the official airline for four Major League Baseball teams, the Texas Rangers, the Baltimore Orioles, the Milwaukee Brewers, and the San Diego Padres. The Los Angeles Dodgers used to fly them as their airline sponsor; they signed a deal with United in 2015; since 2017, Emirates. Also, it serves as a sponsor for NBA teams, including the Houston Rockets and the Indiana Pacers, and it was the official airline for the Super Bowl.
Southwest Airlines is the title sponsor of the annual Southwest Airlines San Francisco Chinese New Year Festival and Parade.
Southwest Airlines painted two aircraft to look like Orcas, with advertisements for SeaWorld. It was repainted to standard Southwest livery following their 26-year partnership.[128] Both N713SW, and N715SW have been repainted in the Heart livery.
Impact on carriers
Southwest has been a major inspiration to other low-cost carriers, and its business model has been repeated many times around the world. The competitive strategy combines high level of employee and aircraft productivity with low unit costs by reducing aircraft turn around time particularly at the gate. Europe's EasyJet and Ryanair are two of the best known airlines to follow Southwest's business strategy in that continent. Other airlines with a business model based on Southwest's system include Malaysia's AirAsia (the first and biggest LCC in Asia), India's IndiGo, Australia's Jetstar, a subsidiary of Qantas (although Jetstar now operates two aircraft types), Philippines's Cebu Pacific, Thailand's Nok Air, Mexico's Volaris, Indonesia's Lion Air and Turkey's Pegasus Airlines. Although Southwest has been a major inspiration to many other airlines, including Ryanair, AirAsia, Lion Air and Jetstar, the management strategies, for example, of Ryanair, AirAsia, Lion Air and Jetstar differ significantly from those of Southwest. All these different management strategies can be seen as means of differentiation from other competitors in order to gain competitive advantages.
Lobbying Texas rail
Southwest has fought against the development of a high-speed rail system in Texas.
In 1991, a plan was made to connect the Texas Triangle (Houston â€" Dallas â€" Fort Worth â€" San Antonio) with a privately financed high speed train system that would quickly take passengers from one city to the next. This was the same model Southwest Airlines used 20 years earlier to break into the Texas market where it served the same cities.
Southwest Airlines, with the help of lobbyists, created legal barriers to prohibit the consortium from moving forward and the entire project was eventually scuttled in 1994, when the State of Texas withdrew the franchise.
Destinations
As of August 2017, Southwest Airlines has scheduled flights to 101 destinations in 41 states, Puerto Rico, Mexico, Central America and the Caribbean. It operates crew bases at the following airports: Atlanta, Baltimore, Chicagoâ€"Midway, Dallasâ€"Love, Denver, Houstonâ€"Hobby, Las Vegas, Oakland, Orlando, and Phoenixâ€"Sky Harbor. Southwest does not use the "hub and spoke" system of other major airlines, preferring the "point-to-point" system, combined with a "rolling hub" model in its larger cities.
Top cities
Airline partnerships
Present
Southwest does not currently partner with any other airline. This has been the case since December 2014 when its partnership with AirTran Airways ended once AirTran became fully integrated with Southwest.
Past
- Icelandair: In 1997, Southwest and Icelandair entered into interline and marketing agreements allowing for joint fares, coordinated schedules, transfer of passenger luggage between the two airlines in Baltimore and connecting passengers between several U.S. cities and several European cities. The frequent flyer programs were not included in the agreement. This arrangement lasted for several years but ended when Icelandair's service to BWI ended in January 2007.
- ATA Airlines: In a departure from its traditional "go it alone" strategy, Southwest entered into its first domestic codesharing arrangement with ATA, which enabled Southwest Airlines to serve ATA markets in Hawaii, Washington, D.C. and New York City.
- At the time of ATA's demise in April 2008, the airline offered over 70 flights a week to Hawaii from Southwest's focus cities in PHX, LAS, LAX and OAK with connections available to many other cities across the United States. The ATA/Southwest codeshare was terminated when ATA filed for Chapter 11 bankruptcy on April 3, 2008. Southwest ultimately acquired the operating certificate and some of the landing rights of ATA in the ensuing proceedings.
- WestJet Airlines: On July 8, 2008, Southwest Airlines signed a codeshare agreement with WestJet of Canada, giving the two airlines the ability to sell seats on each other's flights. Originally, the partnership was to be finalized by late 2009, but had been postponed due to economic conditions.
- On April 16, 2010, Southwest and WestJet airlines amicably agreed to terminate the implementation of a codeshare agreement between the two airlines.
- Volaris : Southwest signed its second international codeshare agreement on November 10, 2008, with Mexican low-cost carrier Volaris. The agreement allowed Southwest to sell tickets on Volaris flights. However, on February 22, 2013, the connecting agreement was terminated. It was said to be mutual between the airlines. Most industry experts believe that the expansion of the subsidiary of Southwest, AirTran Airways, into more Mexican markets, as a main reason for the termination of the agreement.
- AirTran Airways : After acquiring AirTran Airways in 2011, Southwest began a codeshare agreement with AirTran on February 14, 2013. The agreement ended after AirTran became fully integrated into Southwest on December 28, 2014.
Fleet
Since its inception Southwest Airlines has almost exclusively operated Boeing 737 aircraft (except for a brief period when it leased and flew some Boeing 727-200 aircraft). Southwest is the world's largest operator of the Boeing 737, was the launch customer of the 737-300, 737-500, and -700, and will be the launch customer of the 737 MAX 7.
As of July 2017, Southwest Airlines operated the following aircraft:
Newer Boeing 737-300 variants are retrofitted with electronic flight decks, extended overhead bins and blended winglets to reduce operational costs. The retrofits make the 737-300s operationally compatible with the 737-700 and support the airline's move to embrace the Global Positioning System enabled Required Navigation Performance system.
Southwest added the Boeing 737-800 to its fleet on April 11, 2012. The aircraft has 175 seats, 38 more than the former largest 737s in Southwest's fleet.
After completing the purchase of AirTran Airways, Southwest Airlines acquired AirTran's existing fleet of Boeing 717-200 aircraft. However, Southwest elected not to integrate them into its fleet but instead leased them out to Delta Air Lines.
On December 13, 2011, Southwest placed a firm order for 150 Boeing 737 MAX 8 aircraft, becoming the launch customer for the type (although the launch customer of the 737 MAX 8 has since been switched to Malindo Air). First delivery is expected in 2017.
On May 15, 2013, Southwest became the launch customer for the Boeing 737 MAX 7 aircraft and now has 30 MAX 7 aircraft on order. The first delivery is expected in 2019.
Historical fleet
Livery
Southwest's original primary livery was "Desert Sand" (gold, red and orange, with pinstripes of white separating each section of color). The word Southwest appeared in white on the gold portion of the tail. On the original three 737-200s, from June 1971, on the left side of the aircraft, the word Southwest was placed along the upper rear portion of the fuselage, with the word Airlines painted on the tail N21SW. On the right side, the word Southwest was on the tail, but also had the word Airlines painted on the upper rear portion of the fuselage.N20SW. This was later revised to simply include "Southwest" on both sides of the tail. The airline's Boeing 727-200s, operated briefly in the late 1970s and early 1980s, featured other variations on the livery; one was painted in a shade of ochre instead of gold with stylized titles on the forward fuselage and an "S" logo on the tail, while others bore the standard livery (albeit in metallic gold) with the word "Southwest" moved from the tail to the forward fuselage.
Southwest introduced the canyon blue livery on January 16, 2001, the first primary livery change in Southwest's then-30-year history. Spirit One was the first aircraft painted in the canyon blue fleet color scheme. The second livery replaces the former primary color, "Desert Sand", with "Canyon Blue" and changes the Southwest text and pinstripes to gold. The orange and red stripes continued to be used. The pinstripe along the aircraft was drawn in a more curved pattern instead of the straight horizontal line separating the colors in the original. For aircraft equipped with blended winglets, the blended winglets were painted to include the text Southwest.com. Southwest completed repainting its entire fleet with the new "Canyon Blue" livery in early 2010; however, The Colleen Barrett Classic (N714CB), The Herbert D. Kelleher One (N711HK) and The Metallic Gold One (N792SW), which are Boeing 737â€"700 aircraft, retained a simplified version of the original "Desert Sand" livery (now referred to as "Desert Gold" by Southwest).
A new livery, named "Heart" and developed with firms GSD&M, Lippincott, VML, Razorfish, and Camelot Communications, was unveiled on September 8, 2014. The new livery uses a darker shade of blue. The orange stripe on the tail is changed to yellow; both the red and yellow stripes are now enlarged in reverse pattern; and the belly of the aircraft is now in blue and features a heart, which has been a symbol for Southwest during its 43-year history. Additionally, the pinstripes are changed to a silver-gray; and the Southwest text, now white, has been moved to the front of the fuselage. Lettering is in a font custom designed by Monotype, Southwest Sans. The engines now feature the airline's web address, Southwest.com.
Special liveries and decals
Some Southwest aircraft feature special liveries or are named with special decals. Southwest gives these aircraft special names, usually ending in "One." All special liveries painted prior to Spirit One originally wore the standard Desert Gold, red and orange colors on the vertical stabilizer and rudder. Subsequent special liveries feature tails with the canyon blue livery. All earlier specials, with the exception of Triple Crown One, have been repainted with the Spirit livery tail. Aircraft painted in special liveries have white painted blended winglets with two exceptions: Lone Star One, which was fitted with "Southwest.com" blended winglets in January 2011 after having been fitted with plain white winglets in August 2010, and Warrior One, which added the split scimitar winglet in May 2014. Missouri One was the first special livery to feature a modified version of the Heart tail design, with the red and yellow ribbons shrunk in order to fit the Southwest wordmark as it is unable to be used on the fuselage. Previous special livery aircraft will eventually be repainted with the new tail design, Illinois One being the first.
Passenger experience
Southwest offers free in-flight non-alcoholic beverages and offers alcoholic beverages for sale at a flat rate of $5/beverage, with Rapid Rewards members eligible to receive drinks vouchers with their tickets. Free alcoholic drinks are offered on popular holidays such as New Year's Day, Valentine's Day and Mardi Gras. Southwest has complimentary peanuts or pretzels on all flights, and most flights have free Nabisco snacks. Southwest is known for colorful boarding announcements and crews that burst out in song, which is quite popular among passengers.
Southwest maintains excellent customer satisfaction ratings; according to the Department of Transportation (DOT) Southwest ranks number one (lowest number of complaints) of all U.S. airlines for customer complaints. Southwest Airlines has consistently received the fewest ratio of complaints per passengers boarded of all major U.S. carriers that have been reporting statistics to the DOT since 1987, which is when the DOT began tracking customer satisfaction statistics and publishing its Air Travel Consumer Report.
Prior to 2007, Southwest boarded passengers by grouping the passengers into three groups, labeled A, B and C. Passengers would line up at their specified letter and board.
In 2007, Southwest modified their boarding procedure by introducing a number. Each passenger receives a letter (A, B or C) and a number 1 through 60. Passengers line up in numerical order within each letter group and choose any open seat on the aircraft as part of Southwest's open seating policy. According to a 2012 study by Mythbusters, this is the fastest method currently in use for non-first class passengers to board a plane; on average, it is 10 minutes faster than the standard method used by most airlines of boarding from the back frontward.
In-flight entertainment
All 737 Next Generation aircraft are equipped with Wi-Fi, free streaming live television, and movies on demand. After completing a testing phase that began in February 2009, Southwest announced on August 21, 2009 that it would begin rolling out in-flight wi-fi Internet connectivity via Global Eagle Entertainment's satellite-broadband based product. Southwest began adding Wi-Fi to its aircraft in the first quarter of 2010. The airline began testing streaming live television in the summer of 2012 and video on demand in January 2013. As of 2017, live in-flight video and realtime flight tracking information via wi-fi are available free to all passengers, with full Internet access available for $8 for regular passengers and free to A-List Preferred Rapid Rewards members.
Evolve interior
On January 17, 2012, Southwest introduced a plan to retrofit its fleet with a new interior. Improvements include a modern cabin design, lighter and more comfortable seats made of eco-friendly products, increased under-seat space, new netted seatback pockets to provide more knee room, a new fixed-wing headrest and improved ergonomics. All Boeing 737-700s, 115 -800s and 78 737-300s have the Evolve Interior. Though not originally planned, because of space saved, Southwest was able to fit an extra row of seats on its planes. All Boeing 737-800s have the Boeing Sky Interior, which features sculpted sidewalls and redesigned window housings, along with increased headroom and LED mood lighting.
Heart interior
On June 20, 2016, Southwest introduced its newest interior, called the Heart Interior. It includes the widest seat to fit a Boeing 737 that provides additional space for passengers and also includes a new galley. The seat is being delivered on all new 737-800s and will be on all 737 Max aircraft. All current evolve equipped 737s will be retrofitted with new bulkheads and bold blue seat cushions to match the look of the heart interior.
Rapid Rewards
Southwest first began to offer a frequent-flyer program on June 20, 1987, calling it The Company Club. Unlike competitors' programs that were based on miles flown, The Company Club credited for trips flown regardless of distance. Southwest Airlines renamed its frequent flyer program Rapid Rewards on April 25, 1996.
The original Rapid Rewards program offered one credit per one-way flight from an origin to a destination including any stops or connections on Southwest Airlines. When 16 credits were accumulated in a 24-month period, Southwest awarded one free round-trip ticket that was valid for 12 months.
On March 1, 2011, Rapid Rewards changed to a points system based on ticket cost. Members earn and redeem points based on a three-tier fare scale multiplier and the cost of the ticket. Changes also included no blackout dates, seat restrictions or expiring credits. It also adds more options to use points.
Accidents and incidents
Southwest Airlines incidents include 2 deaths (1 non-passenger death on the ground, 1 accidental passenger death in the air) and 7 accidents (including 2 aircraft hull losses). The airline was considered among the 10 safest in the world in 2012.
Controversies
On June 22, 2011, a March 25 recording of an in-flight transmission of Southwest pilot Captain James Taylor apparently unintentionally broadcasting a conversation with his first officer was released to the press. The conversation was peppered with foul language directed at gay, overweight, and older flight attendants. According to Southwest, the pilot was reprimanded and temporarily suspended without pay and received diversity education before being reinstated. Captain Taylor also sent an e-mail apology to all of Southwest's employees, especially the crew members who were criticized.
See also
- Air transportation in the United States
- Southwest Airlines State Fair Classic
- The Southwest Effect
- Transportation in the United States
References
External links
- Official website
- Corporate media site
- Southwest Airlines Seating Charts on SeatGuru.com
- Southwest Airlines Fleet Age
- Southwest Airlines' Yahoo! Finance Profile
- StartupStudio â€" Interview with Herb Kelleher on the founding of Southwest Airlines, recommendations for entrepreneurs and rule of thumb for raising venture funding
- Iflyswa.com (Official website archive)